Tribal Group Blog

Tribal Group Blog

Modelling the impact of changing enrolment patterns in post-secondary education

Many OECD countries currently face falling domestic enrolments. Universities have been able tosuccessfully prop their numbers up by looking to the international student market for a number of years,but there is increased concern about an unsustainable over-reliance on international students.

Increased competition for international student cohorts, a perception that we are now in an era of global instability in international higher education, and a reported slowdown in global student mobility all add to the view that the global landscape is changing and should therefore not form the sole basis of long-term strategy for universities.

In Australia, a 2018 report by the Mitchell Institutewarns that based on current trends VET sector enrolments would fall from 5.3% of 15 to 64-year-olds in 2016 to 1.3% by 2031. That equates to more than half a million fewer enrolments in the sector in just a 15-year period.

Canada has already felt the impact of the potential volatility of the international students'marketfollowing the Saudi Arabia Ministry of Education’s 2018 decision to transfer students out of Canadianinstitutions after a diplomatic meltdown between the two countries. Unprecedented as this situationmay be, it illustrates how heavy reliance on students from any one country increases institutions’sensitivity to economic or political changes.

The 2018 State of Post-Secondary Education in Canada report by HESA acknowledged the inevitabilityof attracting international students, but warned against how Canadian HE institutions go about it:

" We cannot continue to sleepwalk down this road. Making the systems more reliant on foreign dollars changes the kind of system we will have. It will be more oriented to the business, engineering and science programs which the international students want, and less oriented to the health, social sciences and the humanities programs which they tend to avoid. It will be more financially volatile and vulnerable to external political shocks" - 2018 State of Post-Secondary Education in Canada report by HESA

The Group of Eight coalition of Australian Universities echoed this view in itsJuly 2018 report.The challenge for Universities is two-fold – model the impact of their recruitment strategies, and operatethe institution based on the current volume of students. This latter is particularly key for New Zealand’sITPs that have seen significant fluctuations in their enrolment profiles in recent years, and many havestruggled to set their operations at the appropriate levels to avoid running at deficit.

This process of ‘right-sizing’ has been informed by using benchmarking data to model suitable budgets, which can be validated against the performance of peer institutes. Benchmarking data has provided management with a view on the level of investment required in key operational functions such as teaching, support services and facilities, to ensure the continued efficient delivery of high-quality education and training. Benchmarking data also provides the objective data to allow leaders to make well informed strategic decisions on shaping organizations for the future. Naturally, each provider operates different structures and is hit to a differing degree by enrolment fluctuations. The ‘normalising’ of the comparative benchmark data (to remove the impact of different sized institutions) allows leaders to see just what an institution of ‘x’ size shouldactually looklike, where itshould deploy resources to greatest effect, and what the journey to that goal should look like. In this way, the institution can be markedly more agile in reacting to fluctuations, whilst also setting realistic KPIs for their strategic response.

When we look at the other challenge at play here (i.e.modelling the impact of recruitment strategies), benchmarking enables institutes to show how the mix of students (undergraduate/postgraduate, domestic/international) influences metrics such as income per student, and in turn affects financial surpluses.

Here's and example

In 2016 Toi Ohomai Institute of Technology in NZ was created from the merger of two similar sizedITPs. At an early stage of the merger journey, management combined benchmarking data fromboth institutions to get an early view of what the proposed merged entity would look like interms of financial and educational performance. In doing so it had an informed position on wherethere wereopportunities for efficiency gains andwherefuture investment decisionscould be focused

Colleges clearly don’t operate in the same market as universitiesandhave toseek alternative ways to augment fundingin their challengingenvironments. Yet using benchmarking processes to model their investment needs and monitor their growthplans is still critical to colleges - and a similar approach is evident in all three markets discussed here:

1. In the UK, funding reform has led to colleges ramping up their provision of vocationalqualifications (apprenticeships) and competing with traditionally commercial TrainingProviders for a share of the same business. As colleges do not have the resources torun programs at a loss, the business and delivery modelhasto be sound. Given that theoutcomes for students are required to be of a certain standard to continue provision,leadersneed to develop their curriculum with a certain level ofassuredness. Detailed analysis of the college’s curriculum plan demonstrates the financialsustainability of each individual program, enabling the FD to ascertain success factorssuch as:

a) Whether a reduction in teaching hours would make the program financially viable (while maintaining quality of provision)

b) How many students are required to run the program profitably?

Benchmarking curriculum plans against other institutions allows educators to see how otherinstitutionsdeliver qualifications more/less efficiently.

2. Policies in some of Australia’s states have had similar, and sometimes more profoundeffects. Victoria’s ‘opening up’ of the market to private providers in order to encouragecompetitionhas been accused ofcreatinga destabilising impact on the state’s TAFE system. Private providers,who were able to focus on one, two or three qualifications, in effect ‘took away’ fundingfrom TAFE, which created widespread financial concern.

3. In Canada, one might expect similar discussions to be taking place as colleges are urged toshift focus to needed skills and competencies, rather than just credentials

Download the white paper to read more about how globally accepted and proven benchmarking techniques are being used to tackle today’s post-secondary education challenges, including:

1. Improved effectiveness and efficiency of delivery 2. Higher level of governance through greater transparency and accountability for the expenditure of public funds 3. A holistic view of individual institution’s costs and performance relative to other providers 4. Better, more objective plans for business and quality improvement 5. Greater strategic decision-making and increased commercial capability

Mat has worked in the FE & Skills sector for nearly 15 years specialising in the field of educational management solutions, and analytics & benchmarking solutions. He is currently the Marketing Business Partner at Tribal working on projects to support providers through the changing educational landscape.